Work in Process Aug. 1 Balance 270,500 Aug. 31 Goods finished 167,400 31 Direct materials X 31 Direct labor 45,400 31 Factory overhead X Factory Overhead Aug. 1 – 31 Costs incurred 110,300 Aug. 1 Balance 15,300 31 Applied X If the balance of Work in Process on August 31 is $198,700, what was the amount debited to Work in Process for factory overhead in August, assuming a factory overhead rate of 30% of direct labor costs? a.$13,620 b.$167,400 c.$15,300 d.$110,300
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Selected accounts with some amounts omitted are as follows:
| Work in Process | |||||
| Aug. 1 | Balance | 270,500 | Aug. 31 | Goods finished | 167,400 |
| 31 | Direct materials | X | |||
| 31 | Direct labor | 45,400 | |||
| 31 | Factory |
X |
| Factory Overhead | |||||
| Aug. 1 – 31 | Costs incurred | 110,300 | Aug. 1 | Balance | 15,300 |
| 31 | Applied | X |
If the balance of Work in Process on August 31 is $198,700, what was the amount debited to Work in Process for factory overhead in August, assuming a factory overhead rate of 30% of direct labor costs?
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